Monday, August 18, 2014

Why the Green's child poverty policy is a mistake

The Greens are going to give the In Work Tax Credit to parents who are not In Work.

Of course to get around that piece of nonsense they have renamed the tax credit

A new Children's Credit that would give an extra $60 a week to families currently missing out — at a cost of $400 million a year.

Let's remember is was Labour that introduced the IWTC, the rationale being to attract more parents, mainly single, into employment. Clark and Cullen believed that the best way to get children out of poverty was to get their parents into paid work. From Cullen's 2006 budget speech:

The Government believes that ultimately work is the best way out of poverty, and provides the best social and economic outcomes for families in the long run. Making work pay through the In-Work Payment component of the Working for Families package improves people's opportunities to make a better life for themselves and their families.

In Social Developments author Tim Garlick wrote

The decision to strengthen work incentives by not increasing the income of non-working families was strongly criticised by some academics and community groups...

 But they stood by their conviction.

And the courts have upheld the policy's legitimacy against multiple challenges from the Child Poverty Action Group.

Yet the Greens see no value in paid work. No value in children growing up with working role models.No value in actually earning an income; participating, contributing and producing.

All they see is a quick cash cure (with no gaurantee the money will be spent on the children) which comes with the almighty risk that more children will grow up welfare dependent as the financial rewards of working, as meagre as they are, disappear.

I must have said it hundreds of times. Welfare made families poor. More of it is not the answer.


Anonymous said...

Of course the way to solve this problem is simple - increase the "In Work Tax Credit" even more.

I'm sure no-one believes a coalition of KimDotCom and the Losers would be happy with a top tax rate of only 40%, and at as much as $140,000.

I mean the Tories in the UK introduced a top tax rate of 50% - surely MANA want to do better than the UK Tories!

So a top tax rate of 66% or 75% seems quite credible

Anonymous said...

Hi Lindsay.

I think that the Greens efforts to alleviate child poverty is doomed to failure by the very method that is used to define 'poverty' in New Zealand. With poverty defined as a percentage of average income, the same percentage of kids will be 'poor' whether they throw 500 Million, a billion or ten billion at the perceived problem.